ISLAMABAD: The federal government has closed the first quarter of the current fiscal year (July-September 2020) with budget deficit of 1.1 percent of the GDP – 0.4 percent higher than the same period of last fiscal year (0.7 percent) – despite a provincial surplus of Rs 44.3 billion and non-tax revenue collection of Rs 356 billion.

A summary of consolidated federal and provincial budgetary operations 2020-21 uploaded by the Finance Ministry Wednesday on its website noted that overall budget deficit for the first quarter of ongoing fiscal year was Rs 484.324 billion or 1.1 percent of the GDP, however, primary balance was recorded Rs 257 billion or 0.6 percent of the GDP.

Provincial surplus of Rs 44 billion was provided by Punjab and Baluchistan by Rs 28 billion and Rs 29 billion respectively whereas Sindh and KP closed the first quarter of ongoing fiscal year budget with budget deficit negative by Rs 8.5 billion and 4.8 billion, respectively. The government met budget deficit financing through Rs 161 billion external and Rs 322 billion domestic resources, including Rs 230 billion bank borrowing and Rs 92 billion nonbank borrowing.

Total revenue collection during the first quarter was Rs 1478 billion – Rs 1122 billion tax revenue and Rs 356 billion non-tax revenue with federal component of Rs 335 billion in non-tax revenue came from two accounts – Rs 105 billion SBP surplus profit and Rs 136 billion from petroleum levy.

Federal Board of Revenue (FBR) tax collection was Rs 1010 billion which included;(i) Rs 363.6 billion from direct taxes;(ii) Rs 155.5 billion from taxes on international trade (custom);(iii) Rs 435 billion from sales tax and; (iv) Rs 56 billion collection from federal excise duty. Provincial tax collection of Rs 111 billion included Rs 58.4 billion from sales tax on services, Rs 1.9 billion from excise duty as well as Rs 11.6 billion from stamps duties and 7 billion from motor excise tax whereas Rs 32 billion collection was under the head of others.

Total expenditure during the first quarter of the ongoing fiscal year was of Rs 1963 billion besides a statistical discrepancy of negative Rs 64 billion with current expenditure of Rs 1812 billion that included;(i) mark-up payment of Rs 742 billion – Rs 684.8 billion domestic and Rs 57 billion external - ; (ii) defense spending Rs 224 billion;(iii) pension Rs 86 billion; (iv) running of civil government Rs 88 billion;(v) subsidies Rs 2.8 billion;(vi) and grants to others Rs 108 billion while provincial expenditure were Rs 559 billion.

Total development spending during the first quarter stood at Rs 164 billion with federal spending a Rs 79 billion and provincial Rs 89 billion and net lending to PSEs of Rs 50 billion.

Copyright Business Recorder, 2020